Maximizing the Double Bottom Line: Open Source for Microfinance

Microfinance and the provision of small loans to the poorest of the poor has become a proven approach towards eradicating poverty globally. The future of microfinance is limitless as it continues to evolve to serve more clients with varying products and services using new and improved delivery channels. This growth and evolution of the industry will be driven by technology and innovation but requires a solid technology infrastructure at its core. For individual microfinance institutions, Mifos will increase operational efficiency enabling a greater focus on product innovation. For the industry as a whole, having a standard technology solution will promote seamless information exchange as well as open and shared innovation.

Mifos: an open-source solution for the entire industry

Mifos is a robust web-based loan and savings portfolio-tracking system coded in Java. It is released under the OSI-approved Apache License version 2.0, and leverages open source tools such as Struts, Hibernate, and Apache Commons libraries. It is designed specifically for microfinance as a scalable, flexible, and extensible solution.

Open source has great potential to impact microfinance, because of the broad, varied and highly dynamic needs of the industry. Through a freely available and continually evolving core platform, Mifos offers MFIs a flexible and adaptable solution that they can support locally. Sector-wide, standards can be adopted that will promote greater transparency and fuel technological innovation that will help microfinance extend its reach.

Since the launch of Mifos in November 2006 the demand for Mifos has been great. This high level of interest along with our experience with initial deployments has confirmed our thinking that an open source solution supported by a global community has strong potential to help microfinance to help more people get out of poverty. However, it has also made us deeply aware of the obstacles we must overcome to mobilize the resources to fulfill our mission and meet the needs of this diverse market. On both the product side and support side, there are inherent challenges in supporting a global user base and in working in developing countries. And like all open source projects, constructing a global ecosystem of local distributors, support providers and developers is a great challenge.

Building a Sustainable Business Model

Recognizing these challenges, the Mifos team is assessing how we can build an open source business model that will allow Mifos to be sustainable in the development and delivery of Mifos through a global ecosystem of practitioners and providers. The key components of this business model include:

Appropriate licensing – Currently governed by Apache 2.0, assessing the licensing framework that will ensure a core product while encouraging and enabling community-wide contribution.

Product development – How do we separate and define what the core Mifos product is and how much of its development do we want to control to continuously maintain and evolve the Mifos core to the highest quality while still encouraging/managing 3rd party contributions?

Product distribution – What is the appropriate distribution channel (ASP vs. VAR network, etc) for Mifos to rapidly meet and fulfill the industry’s need for Mifos?

Support model – How can we develop and support a network of local service providers who are properly trained and incentivized to deliver the necessary end-user support to MFIs?

Global ecosystem – How do we foster the nascent community of developers, technology partners, and product users collaborating to ensure Mifos is adopted as the industry-standard solution?

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George Conard

Mifos Initiative at Grameen Foundation

George Conard is Director of the Mifos Initiative at Grameen Foundation, leading the team building an open source software platform for the global microfinance industry. A recognized expert on the use of technology to enable the growth and evolution of microfinance and other means of alleviating poverty, George frequently speaks at industry events and advises key stakeholders in the microfinance community on the effective use of technology. Prior to his work on the Mifos Initiative, George lived in Rwanda and worked to establish the Grameen Foundation’s Village Phone program, culminating in the formation of Village Phone Rwanda SARL, a for-profit joint venture between Grameen Foundation and telecommunications company MTN. George served on the board of Village Phone Rwanda and is a founding board member of the Seattle-based non-profit theater company Shady Lane Productions. George brings more than 15 years of technology management experience to the team, including seven years with Microsoft in international marketing and product development roles, and has consulted for organizations including Microsoft, the Asia Foundation, and Digital Partners.